| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
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| #7432 | Closed | public | Multifamily | Les Sparks |
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I have a pesky reporting question regarding the schedule of the status of prior audit findings, questioned costs, and recommendations. For the purposes of this schedule, should the following be reported in section 2 or in section 3 (page 2-39 of the audit guide)? 1. REAC physical inspections during the audit year Also, if the DEC referral was for an apparent unauthorized distribution based on the submission and, based on the client’s response HUD has determined that there was no unauthorized distribution, does it need to be reported here at all? |
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From Les Sparks: The requirement to include items from other HUD agencies or HUD management is limited to findings from such reports. However, it is clear that most of these report will have some sort of findings. Now on the physical inspection, there are so many opportunities for findings and no one wants to have 10-15 other findings about missing plugs. The same would be said for the management review. So, what we would prefer to do is to summarize each of those items into one finding that gives a general overview of what happened and whether there was anything significant to report such as EH&S findings or other material issues from the management report. Then indicate whether items were corrected. Since this schedule does not have to be audited, there is no need to be overly detailed unless there is a significant issue. Lastly, on the REAC letter. If there was an issue they reported here, I would tend to include it unless it was just a simple inquiry. I would do that even if HUD was wrong in their assertion of an issue. From client: Thanks for the reply, but can you address which section each of these types of reports should be in (2 vs 3)? I don’t know what HUD considers an “audit by HUD or a contract administrator” vs. a “review by HUD management” as they state on page 2-39 of the audit guide. From Les: Frankly it is not that clear. The Guide says that items that go into #2 2. The auditee should identify findings from audit, attestation, or other studies (source document) performed by HUD, another Federal agency, or a contract administrator during the period described above that directly relate to the subject matter of the current year audit and include them in this section of the schedule of the status of prior audit findings. And #3 should contain: 3. The auditee is to list any deficiency listed in letters or reports (source documents) issued by HUD management as a result of any reviews of the entity’s activity that relates to the audit objectives and during the period described above. So, where do these things go? Well I guess that is a matter of some judgment. Frankly, both could be in number 3. I could also justify the management review in number 2. However, I am not too sure that it really matters which category these things belong under. Just put them there and be done with it! |